Million-Dollar Wasteland

Nov 07, 2011

The federal government's largest housing program for the poor has spent hundreds of millions of dollars on stalled or abandoned construction projects and routinely failed to crack down on derelict developers or the local housing agencies that funded them.

Good morning. Thanks for joining me to talk about the U.S. Department of Housing and Urban Development's housing construction program for the poor. The HOME program provides badly needed affordable housing, but many construction projects nationwide are delayed or in limbo. HUD hasn't routinely tracked the progress of its projects, but last week, proposed strenghtening the rules for the first time in years.

Where are the 21 projects built that your report says cannot find low income buyers?

A: Debbie Cenziper

In our first round of stories on the HOME program in May, we found that nearly 700 construction and renovation projects funded by the HOME program showed signs of being delayed, either because they were launched more than five years ago or had left federal money untouched for months or even years.

In today's story, we found that the delays are larger than previously reported. Through site visits and calls to local housing agencies, we identified about 75 additional construction projects that drew and spent $40 million in HOME funds with little or nothing to show for the money.

On top of that, we found that newly built homes were actually sitting empty as local housing agencies searched for buyers. We found evidence of this across the country, in cities ranging from Galveston to Denver to New Haven.

Local housing officials blame the economy, saying it's often hard for low-income families to get a mortgage. Some are trying to turn houses built for homeownership into rentals.

Didn't the Feds question your findings last time you investigated? This seems to be a pattern - you uncover some muck and they equivocate. Is there attitude helping taxpayers understand where all that money went? Go Gators!

A: Debbie Cenziper

HUD absolutely pushed back, reporting that the HOME program was strong and solid and that most projects are successfully completed. The agency made this case during two Congressional hearings, including one last week.

Our job, of course, is to follow the money and make sure that there's no waste or misspending in government programs, even those that are clearly important to many, many people.

Gator Deb - please bring your reporting and housing expertise home to Florida, where we are a ground zero for the foreclosure and default crisis. There is a diaspora ongoing, and it is a modern tragedy. Bank p.r. blather about 'free homes for deadbeats' significantly misstates the facts. Please come (back) to Florida and dig in. Gator Nan

A: Debbie Cenziper

Great to hear from you. I wrote about affordable housing at The Miami Herald, and still keep a photo at home of a woman who was able to buy her first house after the county government started cleaning up the housing program there. I was there when she got the keys to the house -- it was an incredible moment. It showed me how about important this issue is, and it's why I wanted to look at it on a national scale.

There is a lot of emphasis in the article on the lack of oversight by HUD (the article correctly notes that HUD is not directly in charge of the construction, just administering funding to housing agencies). Did you ask HUD how much additional effort would be needed to effectively monitor and oversee (and visit) each funded project? With looming budget cuts, is it even possible for HUD to devote sufficient administrative resources to this?

A: Debbie Cenziper

That's an excellent question -- thanks for writing in. HUD has noted several times that it would cost a lot of money to monitor and oversee hundreds of local housing agencies.

It's a fair point. HOME is also a block grant program, and local housing agencies are supposed to monitor their own projects.

The problem is that monitoring often falls short, both at the national and local level, even as millions of dollars go out the door. This has been pointed out by HUD's Inspector General time and again.

HUD's database only tracks how much HUD money is spent -- not what is actually being built. HUD in the past also didn't have specific underwriting standards or many construction deadlines.

So, members of Congress are calling for basic things: third-party monitoring, more site inspections, tighter rules to ensure competitive bidding and stronger tracking of projects.

Last Friday, HUD proposed a major overhaul to the HOME program for the first time in years that incorporates many of these suggestions.

I haven't heard much talk yet about how much this will cost. We'll see what happens next.

Writer investigated HUD scadal near Miami and Opened Pandora Box for local establishment. New York Times in series of articles starting December 31, 1989 (13 in all) documented Sec 8 Fraud in-depth, part of NYC Grand Jury. With so much cash involved, how about a Grand Jury investigation locally? Seems US Congress is part of the trouble, not solution?

Thanks for writing in today. We have more stories planned. Please keep reading.

In This Chat

Debbie Cenziper

Debbie Cenziper joined The Washington Post as an investigative reporter in June 2007 after working for more than five years at The Miami Herald. "Forced Out," her first series at The Post, was awarded Harvard University's 2009 Goldsmith Prize for Investigative Reporting. Cenziper was also awarded the 2007 Pultizer Prize for local reporting for her year-long investigation on affordable housing corruption in Miami, which led to the arrest of three developers and a federal takeover of the county housing agency. In 2006, she was named a Pulitzer Prize finalist in explanatory reporting for her series exposing dangerous breakdowns in the nation's hurricane-warning system. She has reported on numerous subjects including public education, prescription drug abuse and mental health care. Cenziper grew up in Philadelphia and graduated from the University of Florida in 1992.